McCarthy v McIntyre

[2000] FCA 410

FEDERAL COURT OF AUSTRALIA

McCarthy v McIntyre [2000] FCA 410

PRACTICE & PROCEDURE – claim for misleading conduct – partial remitter by Full Court – no question of principle.

RONALD IAN McCARTHY, MAXWELL McCARTHY AND EDLAN NO. 54 PTY LIMITED V NEVILLE McINTYRE, AURO ROMANO McINTYRE AND NEVITORO INVESTMENTS PTY LIMITED

JUDGE:         BEAUMONT J.
DATE:           24 MARCH 2000
PLACE:         SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 672 OF 1996

BETWEEN:

RONALD IAN McCARTHY
FIRST APPLICANT

MAXWELL McCARTHY
SECOND APPLICANT

EDLAN NO. 54 PTY LIMITED
THIRD APPLICANT

AND:

NEVILLE McINTYRE
FIRST RESPONDENT

AURO ROMANO McINTYRE
SECOND RESPONDENT

NEVITORO INVESTMENTS PTY LIMITED
THIRD RESPONDENT

JUDGE:

BEAUMONT J.

DATE OF ORDER:

24 MARCH 2000

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The application be dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 672 OF 1996

BETWEEN:

RONALD IAN McCARTHY
FIRST APPLICANT

MAXWELL McCARTHY
SECOND APPLICANT

EDLAN NO. 54 PTY LIMITED
THIRD APPLICANT

AND:

NEVILLE McINTYRE
FIRST RESPONDENT

AURO ROMANO McINTYRE
SECOND RESPONDENT

NEVITORO INVESTMENTS PTY LIMITED
THIRD RESPONDENT

JUDGE:	BEAUMONT J.
DATE:	24 MARCH 2000
PLACE:	SYDNEY

REASONS FOR JUDGMENT (NO. 2)
(IN THE REMITTER OF PART OF THE PRINCIPAL PROCEEDINGS)

BEAUMONT J:

1. I will deal now with the part of the original application which has been remitted to me.  I have earlier today given reasons for refusing to allow the second applicant leave to re-open his case.  My reasons for that refusal state the background to the remitter.  I there referred to the four matters which, as abstract propositions (as the Full Court indicated in para 46 of its reasons) would need to be established if the alternative case now sought to be made could succeed.

2. The first proposition stated by the Full Court was:

   “That had the true figures been revealed, Westpac would not have provided finance.”

3. In my opinion, once it be assumed, as it must be for present purposes, that no further evidence can be adduced before me for the purposes of dealing with the remitter, it must follow, I think, that proposition 1 could not be made out:  Westpac was never called to give evidence before me, although some Westpac documentation was tendered in evidence.  The issue posed by the Full Court in proposition 1 proceeds, naturally, upon the assumption that my findings in the matter so far as takings are concerned, stand.  In those findings, I found that the average weekly sales in the relevant period were approximately $40,000 per week (see page 15 of my reasons dated 19 May 1998).  I also there noted that it was common ground that the figures supplied to the valuers were considerably more, in the order of $47,000 to $48,000.  I would be prepared to take judicial notice of banking practice to require, generally speaking, that a valuation be obtained for the purpose of satisfying a bank approached for finance to be secured over the business to be valued.  However, I cannot take judicial notice that Westpac would, or would not, have provided finance in the present connection if it had known that the takings were not $47,000 to $48,000 per week but were in fact only $40,000 per week.  I would be prepared to take judicial notice of the fact that upon a capitalisation of the profits of the business, the deficiency in the takings would impact to some extent upon the value of the goodwill of the business and may also have some influence upon the judgment of a banker or other financier in assessing the capacity of a borrower to service a loan.  But beyond those two very general matters of which (as I have said) I would be prepared to take judicial notice, there was no specific evidence of the matters stated by the Full Court in proposition 1. 

4. Proposition 2 of the Full Court’s statement was as follows:

   “That finance would not have been available from any other source.”

5. But again, this is not a matter about which any specific evidence was given.  It is not an area in which judicial notice may be invoked. 

6. Proposition 3 of the Full Court’s statement, relating to the hypothetical findings in propositions 1 and 2 above, is that in consequence, the parties would not have entered into the transactions they did.  Again, this is a matter which was not specifically addressed in the evidence. 

7. The fourth proposition in the Full Court’s reasons is that Mr Max McCarthy or Mr Jack McCarthy, or both, suffered loss as a result, including, within that finding, the extent of that loss.  The Full Court went on to note, in this connection, that it was conceded by Senior Counsel for the McCarthys that it could not be shown that Mr Jack McCarthy had suffered loss, so any such finding would be limited to Mr Max McCarthy.  Again, there was no specific evidence directed to this proposition. 

8. In those circumstances I have come to the view that the matter remitted to me (being the application on behalf of Mr Max McCarthy) must, in the circumstances, inevitably be dismissed.  I so order.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont.

Associate:

Dated:             24 March 2000

Solicitor for the Applicant:	Mr Chris Adamson Paclaw
Counsel for the Respondent:	Mr Peter Biscoe QC,  Mr M J Cohen
Solicitor for the Respondent:	Mr K A Garling
Date of Hearing:	24 March 2000
Date of Judgment:	24 March 2000